Setting up your own business is a daunting task at any time, now made even more difficult thanks to the Covid-19 pandemic and the resulting economic lockdown. As well as the Paycheck Protection Program designed to help businesses keep their workforce employed during this crisis, there are other loans available. To help you make sense of it all, here are four business loans that your enterprise could be eligible for.

Small Business Administration Loan

Although not technically a loan, a small business administration loan (SBA) will help your small business (defined as a business having less than 500 employees) to obtain funding by reducing the risk for lenders. There are certain requirements in order to access an SBA:

Business Equipment Loan

From industrial sewing machines to welding equipment, a lot of businesses require specialized equipment to carry out the job. As well as being essential, a lot of this equipment is very expensive. Fortunately, business equipment loans are available to help ease the cost of buying or leasing essential professional equipment. One huge benefit of a business equipment loan is that as the equipment acts as its own collateral, applicants do not have to secure the loan with valuable assets.

Commercial Vehicle Loan

As with specialized equipment, many businesses require the use of a vehicle as an essential part of the work offered. For instance, you may require a truck to carry equipment to and from building sites, or an automobile to visit various clients. They are also large expenses, particularly larger specialized vehicles like semi-trucks. A business auto loan will help cover the cost of buying or leasing a vehicle for commercial use, with the vehicle itself used as collateral. Loans are available for both new and old vehicles, with long repayment terms possible.

Merchant Cash Advance

A merchant cash advance (MCA) is a lump sum loan that is repaid with a percentage of any future debit and credit card transactions. With a payment period shorter than other business loans, MCAs are worth considering if you don’t want a lengthy repayment schedule hanging over you, and are confident that you can repay quickly. Unlike a business equipment loan or commercial vehicle loan, an MCA is not tied to any particular part of the business, meaning that you can spend it in a way that will most benefit your business. However, despite providing a quick access to funds, MCAs are typically only used as a final option when a company is in a difficult financial situation without access to any other source of funding. This is due to higher interest rates on repayments than for other business loans.

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